One year ago this week we were driving down to Kingwood, TX, for Jed’s ten year high school reunion. The photo above was taken at the reunion. Jed had been telling me about this guy Dave Ramsey who had a plan for our finances. We stayed with Jed’s brother Sam and his wife Michelle, who were on the plan. On the trip down we listened to “Debt Free Friday” on the Dave Ramsey radio show, and I cried every time one of the famillies screamed, “We’re debt free!”. Over the course of the weekend, with some major encouragement from Sam and Michelle, we decided to jump on board. We made a budget, joined the “Total Money Makeover“, and were on the road to financial freedom.

We cut up our credit cards and started using cash. We got serious about paying off our debts. In four months we paid off $13,000 worth of debt, and were totally debt free for the first time in our lives. Then we started saving up and emergency fund. You can read more about that here. We finished our emergency fund in May with 3 months of expenses saved in an account we don’t touch. In July we started Baby Step 4, investing in our retirement. We are also saving for our first house and for a baby.

I cannot believe that it has only been a year since we started this journey. I cannot express in words the freedom I feel. We don’t make very much, and don’t have much hope of salary increasing. I’m in full time ministry and Jed is a teacher. Even with our modest earnings, we have found financial peace.

Just so you know how we have struggled in the past, I’ll sum up a brief financial history of us for you. In college we both got credit cards in the student union for the free t-shirts. We both started off paying them off each month. Then I started using mine to travel, go to concerts, etc. Probably the worst thing I did was put 5 plane tickets to NYC on my card for my friends. When they paid me back I didn’t put they money towards the card. It took me 8 years to pay for that trip. I don’t know what Jed spent his money on, because we didn’t know each other then. He came out of college with a mountain of student loan debt plus his credit cards. I spent the next few years being consistently late with payments, dodging calls from creditors, and still spending. I bought a brand new car I couldn’t afford, only to have to sell it a year later for a $3000 loss. In 2003 I consolidated $15,000 of debt into a loan. I promptly began to run up more debt. In 2005 I consolidated all of my new debt, $12,000 worth. I paid all of my debts off by the summer of 2008. Jed brought into our marriage the $13,000 worth of debt that we paid off this year. Basically we were both not to be trusted with credit cards, and in a finacial mess. Now that mess is gone and we are free. I never have to worry about a creditor calling me again.

Do you budget? Tell me about your financial story.

Click below to make a quick budget for yourself.

9 Comments on Frugal Friday – What a difference a year makes…

  1. I keep hearing about this debt-free guy lately haha

    I have 1 credit card my parents gave me in high school that I use for emergencies only (never) Mom & Dad always taught me to never buy anything on credit unless it’s a house or possibly a car.

    Everything else I’ve always paid cash/debit, but then again I have never bought a house or car.

    My husband and I bought a fridge and mattress on credit recently bc we couldn’t afford cash because of the upcoming wedding, but I made sure to pay $200 up front. I think we owe about $300 or so?? But it should be paid off by October.

    We’ll get a credit card soon, but only because we want to build up a good credit score. (Isn’t it sad how people who are responsible enough to always pay cash can’t get a loan because they have no credit?)

  2. My seminary offered a weekend seminary on financial planning and we learned a little of Dave Ramsey’s techniques there. My husband and i got serious about that and started budgeting.
    We’ve paid off our our debt except for my school debt, but we’re working on getting that paid off!
    i do use our credit card for most purchases, but i pay off everything each month so there is never an outstanding balance. i’ve almost got enough rewards points to get a Nook (Barnes & Nobles e-reader), so that’s the only reason i use a credit card!

  3. Wow, what a great success story! We’ve had several friends (and my parents) do the DR stuff with amazing results. I asked for the materials as a wedding gift and 2.5 years later, we still haven’t gone through it. Bad I know! I wish there was a group class to go to that would kick start us! But really I know we have everything we need… just need to discipline ourselves to get started. It’s hard to come home after work tired and then think about doing a financial course by DVD if you know what I mean. (Ugh.) Though we don’t really have any debt, we do really need to get serious. We’ve both been full time volunteers raising our own support (with YWAM) for about 10 years and don’t make much “income”… and yet I know if we were to get smarter we could save and invest instead of always living just month-to-month. Living on such a small amount of money shouldn’t be an excuse for us… and I know that! Thanks for [yet another] reminder to take some action in this area! So glad you guys have found freedom and are flourishing in this area!! 🙂

  4. Hi! I’m visiting from SITS tonight. Wow, being debt free must feel great. It’s amazing how fast you can make a change, huh? We only use the debt card now and I love it. Today I saw that after taking the dog to the vet, we’re broke till Monday when one of our paychecks hits our account. That’s cool. So a quiet weekend at home with no bill showing up a few weeks later. No problem.

  5. Congratulations!!I am proud of you and agree that being debt free, especially in these economic times, is one less headache to deal with. Sometimes emergencies arise and being able to take care of them is a blessing that managing money helps. Visiting from Day 21 of 31DBBB Challenge.

  6. what a great post! congratulations! Fortunately my hubby and I don’t have any credit card debt, but when I married him earlier this year, I inherited $65,000 of his school loans. We just finished up a 6 month honeymoon and looking for jobs and a place to live and hoping to start chipping away at the loans.

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